Significance of implementing Equalization levy

Committee on taxation and ecommerce report, released by the Central Board of Direct Taxes focuses on the equalization levy.
Senior officials and representatives from the Institute of Charted Account of India, Income tax department, independent representative officials and officials from the Finance Ministry formed a committee and insisted to limit the equalization rate at 6% and they also calculated previous year’s hike rate.
The Managing partner of Nangai & Co, Rakesh Nangai said that the experts had different opinions on the proposed Equalization levy, some of them considered it as a holding tax, while others expected that it is an imposition to foreign beneficial and others named it as an indirect tax.
Thus the Central Board of Direct taxes published a report on ‘Proposal on EQL on Specified transaction’ which explained in detail about the levy and resolved the speculations of the tax experts. The report consist of one hundred and twenty four pages covering the use and download of online software applications, goods and service sales, cloud computing, web designing and hosting, digital marketing, etc.
If a resident of India or a non-resident entity or a non-resident who has a permanent establishment whose payment exceeds one lakh are under the Equalization levy. And to limit its impact, the business to business transactions and the business to consumer transactions are almost kept.
Rakesh Jariwala said the Equalization levy is important, because only then the government would give a clear picture of the transactions covered under the levy. And to differentiate the income tax and the EQL, or else it would lead to the double taxation.
A recent report says the global economy is slower than the digital economy and the more it drives people to take part in it significant. According to the government report, the ecommerce market in India has grown up to 12.6 billion.

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